Given the extremely high inflation, Turkish President Recep Tayyip Erdogan has announced a tougher crackdown on stores that raise their prices excessively. As part of the next cabinet meeting, stricter measures will be discussed for supermarkets and shops that charge excessive prices for goods, broadcaster Habertürk reported on Monday.
On his return flight from Qatar, Erdogan told reporters that previous fines were not enough to punish such vendors. “Inspections are continuing with completely different methods, since the fines obviously do not improve,” Erdogan told the broadcaster. “The most important thing is that they have to pay a higher fine.”
Consumers suffer from sky-high costs
Turkish consumers suffer from rising cost of living. The officially established inflation rate is more than 85 percent. Experts blame Erdogan for a significant part.
Erdogan wants to use cheap credit to boost production
Despite the strong inflation, he counts on interest rate cuts by the central bank. “As long as your brother is in this position, interest rates will fall every day, every week, every month,” Erdogan said a few weeks ago. He wants to use cheap credit to stimulate production and export, which in turn should create more employment.
The Turkish central bank did not continue its unorthodox monetary policy until October and cut its policy rate again. It was reduced from 12.0 to 10.5 percent. At the same time, the central bank announced another cut. The central bank started easing its monetary policy just over a year ago. Then the interest was still 19 percent.
Lira weakens
One reason for the high inflation is the weakening lira. Turkey’s national currency depreciated more than 44 percent against the dollar last year alone, and by another 29 percent this year so far. This makes imports paid for in foreign currency significantly more expensive, fueling inflation. Economists advise higher interest rates with high inflation and a weakening currency to make the lira more attractive to investors
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
